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Does AI Data Center Doubling Mask onsemi's Analog Lag?
AI data center revenue more than doubled while the AMG analog segment fell 5% YoY, leaving onsemi in the awkward middle of an uneven analog recovery.
05/05/2026
By The Numbers
- Revenue: $1,513.3M, exceeded midpoint of $1.44B-$1.54B guidance, -1% QoQ, +5% YoY
- Non-GAAP EPS: $0.64, beat ~$0.62 consensus, flat QoQ, up from $0.55 in Q1 2025
- GAAP EPS: ($0.08) loss, weighed by $329M in restructuring, asset impairments, and other charges
- Non-GAAP gross margin: 38.5%, +30 bps QoQ, down 150 bps from Q1 2025's 40.0%
- Non-GAAP operating margin: 19.1%, +80 bps YoY from 18.3%
- Non-GAAP operating income: $289.6M, +10% YoY, growth outpaced revenue by 2x per management framing
- Segment splits: PSG $736.6M (+14% YoY); AMG $540.4M (-5% YoY); ISG $236.3M (+1% YoY)
- End-market splits: Automotive $797M (~flat QoQ, +5% YoY, first YoY growth in seven quarters); Industrial $417M (-6% QoQ but ahead of expectations); AI data center >+30% QoQ and >2x YoY
- Free cash flow: $217.2M; share repurchases $346M (~160% of FCF)
- Capex: $21.9M, versus $147.6M in Q1 2025
- Cash and short-term investments: $2.40B; long-term debt $2.98B
- Q2 2026 guide: revenue $1,535M-$1,635M (above ~$1.535B consensus); non-GAAP gross margin 38.0%-40.0%; non-GAAP EPS $0.65-$0.77
The News
onsemi reported Q1 2026 revenue and EPS both exceeding the midpoint of guidance. During the call, management framed the quarter as the cycle's clear low point and the start of a recovery path. AI data center revenue more than doubled year over year and grew over 30% sequentially. The automotive segment returned to year-over-year growth for the first time in seven quarters. The Q2 2026 guide of $1,535M-$1,635M and non-GAAP EPS of $0.65-$0.77 sits modestly above consensus, signaling sequential momentum even as full-year recovery shape stays uneven across end markets. Press release
Analyst Take
onsemi's results hit at a moment when the analog recovery narrative has solidified, and our read is that the print confirms participation rather than leadership. CEO Hassane El-Khoury's framing of a cyclical trough behind onsemi aligns with the broader sector tone, but the question we keep returning to is positional. Against same-quarter prints from Texas Instruments, NXP, and Monolithic Power Systems, onsemi grew 5% year over year while peers grew between 12% and 26%. The contrarian read is that the analog recovery is real but bifurcated, and these results seem to indicate that onsemi's relative position has softened rather than stabilized. The AI data center doubling is genuine and material, but it sits inside a Power Solutions Group that lifted while the Analog and Mixed-Signal Group contracted. Strength is concentrated, not broad. The broader portfolio is still working through the cycle's residual mix problems.
What the Numbers Mean
Three signals from the call sharpen our read. First, El-Khoury's framing that onsemi is "more leveraged to content than SAR" is the strategic answer to the auto unit-volume question. China provides the cleanest illustration here: passenger vehicle units fell 6% in the quarter while onsemi's China automotive revenue grew year over year. The Treo analog mixed-signal platform, which El-Khoury described as carrying 60% to 70% gross margins, is moving from product proliferation into design-win ramps, with zonal architecture programs built on 10BASE-T1S Ethernet translating into initial production shipments at a leading North American OEM. The content thesis is moving from slide to revenue.
Second, on the AI data center side, El-Khoury was explicit that the growth is breadth-led across the PowerTree, with ASIC vendors and hyperscalers contributing in parallel, and that 2026 AI data center revenue should double versus 2025. Our skepticism is calibrated: a growth floor that doubles off a base measured in tens of millions does not yet move the consolidated growth rate the way it does for peers further along the AI power curve. The mix tilt is favorable, but the absolute contribution is still scaling.
Third, the operating leverage story has cleaner support. CFO Thad Trent flagged that lead times stretched modestly quarter over quarter, with orders increasingly arriving inside lead time and as expedites, which is the textbook utilization signal we monitor in early-cycle recoveries. The portfolio rationalization program is roughly two-thirds complete, with the remainder expected to close in Q2, which should let the operating margin trajectory step up cleanly into the back half.
Market Analysis
Across the same-quarter peer set, the recovery shape is unmistakable but uneven. Texas Instruments (TXN, Q1 2026) cleared prior peaks in both industrial and automotive and delivered an 11% after-hours stock move on its print, the largest TXN single-session reaction since 2022. NXP saw its automotive growth drivers reach north of 45% of segment revenue while industrial and IoT lifted sharply, and the company guided next-quarter growth materially above onsemi's pace. Monolithic Power Systems raised its 2026 enterprise data growth floor and lifted its long-term capacity goal, signaling that AI power exposure is pulling the entire growth curve forward for power-platform purebreds.
Against this constellation, onsemi's mid-single-digit top-line growth and AMG segment contraction stand out qualitatively. Our reading is that the analog cycle floor formed in late 2025 across the cohort, but the slope of recovery diverges sharply by mix. Texas Instruments cleared prior peaks. NXP's auto content drivers are now the majority of segment revenue. Monolithic Power Systems pulled enterprise data forward by quarters. onsemi sits on the lower end of that band, with a power semiconductor portfolio still rebuilding utilization and an AMG segment still mix-impacted by automotive content shifts.
The next data point we are watching is Infineon's fiscal Q2 2026 print on May 6, given Infineon's similar SiC-and-power-discrete posture and direct EV exposure. That print should help indicate whether the European auto and industrial recovery shape mirrors what we are seeing across U.S.-listed analog and power names, or whether onsemi's relative lag is more company-specific than cycle-driven.
Looking Ahead
Based on what we are observing, the key trend we'll be monitoring is whether onsemi's content-led automotive thesis can compound the AI data center halo into broader Analog and Mixed-Signal recovery rather than leaving the segment as a drag on consolidated growth. Four catalysts shape our watch list. First, the cadence of Treo revenue scaling and its margin profile, given the elevated gross margin range El-Khoury referenced, since this is where the structural mix shift becomes visible in consolidated gross margin. Second, the AI data center revenue trajectory inside the Power Solutions Group, where the doubling target requires sustained Treo-platform pull and PowerTree socket wins through the second half. Third, the silicon carbide attach rates at upcoming auto shows beyond Beijing's roughly 55% reading, which we view as a leading indicator of next-generation 900V platform momentum with Geely and NIO. Fourth, the gallium nitride design funnel, which El-Khoury indicated now exceeds $1.5 billion spanning 40 to 1,200 volts and including vertical GaN, providing forward optionality that does not yet show in revenue but should begin to inflect through 2027 as 800V data center platforms and AI client power management ramp. The Q2 print and the August quarter together should clarify whether the cycle slope steepens for onsemi or flattens.
Stephen Sopko | Analyst-in-Residence – Semiconductors & Deep Tech
Stephen Sopko is an Analyst-in-Residence specializing in semiconductors and the deep technologies powering today’s innovation ecosystem. With decades of executive experience spanning Fortune 100, government, and startups, he provides actionable insights by connecting market trends and cutting-edge technologies to business outcomes.
Stephen’s expertise in analyzing the entire buyer’s journey, from technology acquisition to implementation, was refined during his tenure as co-founder and COO of Palisade Compliance, where he helped Fortune 500 clients optimize technology investments. His ability to identify opportunities at the intersection of semiconductors, emerging technologies, and enterprise needs makes him a sought-after advisor to stakeholders navigating complex decisions.